He Said ‘I Quit’… But Was It Really a Resignation?

A recent Fair Work Commission decision is a good reminder that when an employee walks out the door, the story isn’t always as simple as it looks.

In Arnaz v Mildren & Coysh, an Operations Manager had a heated argument with his employer, said “I’m over it, I quit,” and left the building. His employer treated it as a resignation and moved on. The employee then filed an unfair dismissal claim, arguing he was forced out, citing a demotion, verbal abuse, and what he described as unhealthy psychosocial working conditions.

The claim was ultimately dismissed, but not because the employer was in the clear. It was dismissed because the employee filed five days late and couldn’t satisfy the high bar required for an extension of time. The actual merits of his case were never tested.

That’s the part worth paying attention to.

A resignation isn’t always a resignation

Under the Fair Work Act, an employee can argue they were constructively dismissed even if they were the one who technically resigned. If the employer’s conduct made the working environment so intolerable that the employee had no real choice but to leave, that can count as a dismissal.

In this case, the employee’s version of events included a demotion from a senior role, ongoing verbal abuse from management, and claims about psychosocial harm. Had his claim been heard on its merits, those are exactly the kinds of facts that tend to go against employers.

The takeaway: if someone walks out after a heated exchange, especially one involving a demotion or a pattern of poor treatment, don’t assume the file is closed.

The mental health angle matters

The employee also cited depression as a reason for filing late, noting he was waiting on documents from his psychiatrist. The Commission didn’t reject this outright. It said the evidence just wasn’t specific enough to establish how his condition had actually affected his ability to file on time.

That’s a narrow gap. A proper medical statement outlining the nature and duration of the condition may well have tipped the outcome the other way.

For employers, this is a reminder that mental health claims in the context of a resignation or dismissal deserve careful handling. Dismissing them too quickly, or failing to document how you responded to them during employment, creates risk down the track.

Psychosocial conditions are a live issue

The employee’s reference to “unhealthy psychosocial work conditions” didn’t get argued fully, but it’s consistent with a broader shift in how workplace law is treating psychological safety. Employers have obligations here, and regulators are paying more attention to them.

If someone raises concerns about their psychological safety at work, formally or informally, that needs to be documented and responded to. Ignoring it, or worse, dismissing it as drama, is exactly the kind of conduct that supports a constructive dismissal argument later.

What this means for your business

Three things to take away.

When an employee resigns in the heat of the moment, pause before treating it as done. Give them a short window to confirm in writing, and document the circumstances carefully. If there’s any suggestion the resignation was provoked by management conduct, get HR advice before you finalise anything.

If a team member raises mental health or wellbeing concerns, respond to them properly and keep a record. It doesn’t have to be complicated, but it does have to happen.

And if someone is being demoted, make sure that process is handled correctly. A demotion that isn’t managed well, with proper documentation and clear reasoning, is a constructive dismissal waiting to happen.

The employee in this case ran out of time. Your next one might not.

Not sure how to handle a resignation that feels complicated? Talk to HR Gurus. We help Australian businesses manage people situations the right way, without the drama or the guesswork.